June 28, 2016

On June 28, 2016, a coalition of consumer groups composed of Consumer Action, Consumers Union, Consumer Watchdog, Consumer Federation of America, and US PIRG filed comments to Georgia Insurance Commissioner Ralph T. Hudgens regarding the proposed mergers of Anthem-Cigna and Aetna-Humana. The purpose of these comments was to raise concerns about the mergers and their impact on healthcare in Georgia and to commend the Office for holding public hearings to evaluate the merger. Here are a number of specific points raised:

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• Under Georgia law, the Commissioner can disapprove a merger if it would substantially lessen competition in insurance or tend to create a monopoly. These mergers and the market shares that would result from them are well above the prima facie anticompetitive thresholds. 

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• The mergers would result in substantial loss of competition in the individual insurance market. A combined Anthem-Cigna would possess 29.6% market share, and a combined Aetna-Humana would possess 58% market share. In the small group market, Anthem-Cigna would have 33% market share, and Aetna-Humana would possess 49% market share. 

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• These mergers would also lead to a loss of competition in the large group insurance market. Anthem-Cigna and Aetna-Humana would control about two-thirds of the market. And in the ASO market, Anthem-Cigna would possess 71% market share. Finally, in Medicare Advantage Aetna has 9% market share and Humana has 22%, so together they would possess 31% of Georgia's MA market. 

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• The mergers would result in the loss of potential competition in Medicare Advantage. Additionally, the merging companies have committed numerous consumer protection violations, and consumers needed assurances that these problems have been solved. 

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• Consumers will pay higher premiums as a result. Georgians are already facing increasing costs; Humana has also requested a 65.2% average premium increase for individual plans on Georgia's health exchange in 2017. When health insurers merge, there is almost always an increase in premiums. 

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• The merging companies claim that these deals will lead to efficiencies and benefit consumers. However, they have offered little evidence to support these claims, and there is no evidence that benefits are passed on to consumers. California Commissioner Dave Jones noted that the companies have repeatedly failed to provide information about any such benefits. 

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• Divestitures are an inadequate solution and usually fail to restore competition or protect consumers. However, the Georgia Office possesses broad power to enact other remedies to protect consumers. 

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To see the full comments submitted to Commissioner Hudgens please click here.  

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To see the policy brief submitted by Georgians for a Healthy Future, please click here. 

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To see the comments submitted to Commissioner Hudgens by the Medical Association of Georgia, please click here. 

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To see the comments submitted to Commissioner Hudgens by Georgians for a Healthy Future, please click here.